Problem-Solution Fit & Product-Market Fit
Have you ever wondered how new products are discovered? And what it is we have to do before building a product?
To begin with a product, you have a checklist to tick:
- Desirable — Do customers want this?
- Feasible — Can we do this?
- Viable — Should we do this?
The most important and initial part of any product’s life cycle is the Problem-Solution Fit and Product-Market Fit phases. In those phases, we check the desirability, feasibility, and viability of the product.
What is PSF & PMF?
PSF: Every product solves a unique problem statement. Nonetheless, not all problems are worth solving. In the PSF phase, we find if the product is desirable by getting answers to the following questions
- Is this a problem worth solving?
- Do we have a solution to that problem?
PMF: It is the most important milestone of a product. In simple words, we check whether we are in the right market with the right product or not. In PMF, we find out if the product is viable and feasible
- Viable — Is it profitable?
- Feasible — Can we build and scale it?
Innovation is where your product lies. Here is a diagram for a better understanding of this.
How do we do this?
We check the Problem Solution Fit followed by the Product Market Fit. This is an iterative process where we build-measure-learn.
We will propose a solution (which is a hypothesis for now as it has not yet been tested with the customers) and slowly start converting it into a product.
Initially, the solution hypothesis will have the maximum uncertainty which we reduce eventually through the build-measure-learn process.
The cycle of PSF and PMF is
PoC — Proof of Concept, MVP — Minimum Viable Product
We identify the problem (build), test it with customers (measure), get the insights from the feedback (learn) and move to the next step or redo the current step (build again).
We do the build-measure-learn at every step of the cycle.
As soon the MVP is ready (build), the Product-Market Fit phase starts. We have to release it at the right market at the right time and see how it solves the customer’s need (measure), and get insights (learn) to improve it further. We will find out whether our solution is viable (profitable) at this phase, which paves the way for a stable business model.
The next phase after PSF & PMF will be scaling and retention in the market which will be separate topics.
Things to remember during these phases
- Do the minimum experimentation to learn the most.
- Instead of building what the customer wants, understand the problem statement and build a solution that the customer actually needs (Fall in love with the problem, not with the solution).
- Infrastructure should grow along with the customer base
